Published : 2013-10-25 20:12
Updated : 2013-10-25 20:12
Korea’s economy grew 3.3 percent in the third quarter from a year earlier and 1.1 percent from the previous quarter mainly due to increased private spending and facility investment, the central bank said on Friday.
The on-year performance marks the highest growth in gross domestic product since the last quarter of 2011, which posted 3.4 percent.
“The (country’s) economic growth rate in the third quarter is seen to be on the path of going up,” said Jung Young-taek, the head of the economic statistics department of the Bank of Korea.
The BOK said that this year’s GDP growth was slow in the first quarter, but picked up pace from the second quarter and continued to rise, thanks to a general increase in government outlays, private consumption, construction and capital investment.
Asia’s fourth-largest economy sustained 1.1 percent on-quarter GDP growth for the second and third quarter this year.
Growth of gross domestic income increased by 0.4 percent in the third quarter from the previous quarter’s 2.7 percent, showed data from the central bank. The GDI gauges a country’s economic activities based on income, while GDP measures them based on expenditures.
In this year’s third quarter between July and September, the country’s growth in capital investment swung to 1.2 percent from negative 0.2 percent from a quarter earlier.
Imports grew 0.1 percent due to rising income from intellectual property rights, but exports contracted 0.9 percent in reflection of the underperformance of the machinery and petrochemical industries.
Among all industrial segments, the agriculture and fishery, manufacturing and construction sectors made the largest growth quarter-on-quarter, followed by energy and services.
The service sector, closely linked with domestic consumption, grew the most in the healthcare and social welfare areas, followed by culture and entertainment and insurance.
Growth in the real estate and education sectors turned negative, the data showed.
Since its July projection, the central bank has maintained Korea’s 2013 growth outlook at 2.8 percent.
But it revised its 2014 growth outlook down to 3.8 percent from its initial forecast of 4.0 percent on Oct. 10, citing the country’s large household debt and other external uncertainties, such as the U.S. Federal Reserve’s monetary tapering and unstable oil prices.
The central bank’s 2014 revision followed that of the International Monetary Fund, which reported that Korea is set for a “modest recovery” backed by its fiscal and monetary stimulus.
“The economic activity is still relatively sluggish, and so growth in the final quarter may decelerate slightly,” HSBC Global Research said in a report on Friday.